Questioned at last Wednesday’s Mayor’s Question Time Mr Livingstone indicated that he did not how much fare revenue would be lost due to the take up of the new concession. One London Party leader Damian Hockney later claimed the loss could be as high as £70 million but this was strongly denied by Mr Livingstone’s office who told MayorWatch “the total cost of the travel concession in terms of fares will be of the order of £15m.”

Speaking yesterday Mr Hockney dismissed this claim as “ludicrous” adding that it was “suspiciously convenient as the oil discount is worth £16 million. That would mean only about one in five of those eligible will claim it.”

The party say that “being kind” their figures suggest the full package, including the provision of services to Venezuela, would “cost Londoners £20-£25 million.”

However a spokesperson for Mr Livingstone said Hockney’s figures were “wildly inaccurate and suggest no experience whatever in calculating the costs of transport schemes.”

Explaining how the Mayor and Transport for London arrived at the figure of £15million the spokesperson said “the half price fare for people on Income Support is worth up to £280 a year – that is half the cost of an annual bus pass, which is the cheapest way of travelling by bus. ”

“But the value of the concession to its recipients is not the same as the cost to Transport for London as that cost has to take into account not only the revenue lost as a result of the reduction in fares, but also the increased revenue due to people making more trips and the fact that not all of those entitled to the concession will take it up or make very many trips.”

“Therefore it is totally false to claim to work out the cost to Transport for London by simply multiplying the value of the concession to its recipients by the number of eligible people as Damien Hockney does. Taking all of these factors into account, Transport for London’s calculations show that the total cost of the travel concession in terms of fares will be of the order of £15m a year, which is therefore what the Venezuelan oil company is providing.”

In his statement yesterday Mr Hockney said the Mayor was guilty of “electioneering using public money”. However the Mayor’s office said the scheme is solely “about helping a quarter of a million of the least well off Londoners by providing them with half price bus and tram travel.”

“The assistance and advice to be given to Venezuela in matters such as city development, environmental protection, tourism and transport is one of the most valuable things they could receive, which is why they want it.”

“To buy this assistance from commercial consulting companies would cost far more, and deliver far less, than what can be achieved througha direct agreement with London. Just as Venezuela has an abundance of energy resources, it is relatively cheap for London to supply such expertise because of its long experience in all fields of city management. That is why it is a ‘win win’ deal for both sides.”